Foreclosure Starts Accelerate

Foreclosure starts continued to accelerate in August as Fannie Mae and Freddie Mac enforced more aggressive timelines on early stage delinquencies, loan data aggregator Lender Processing Services Inc. said in releasing its latest monthly loan performance report.

The pace at which seriously delinquent homeowners transition into foreclosure -- in many cases after leaving the Home Affordable Modification Program (HAMP) -- also continued to pick up, LPS said.

The 282,528 foreclosure starts initiated by lenders in August represented a 29 percent increase from the low for the year, seen in April, and was the highest level since July 2009.

That helped the total number of homes in the foreclosure process grow to 2.04 million, even as the number of delinquent loans not yet in foreclosure eased 7 percent from a year ago, to 4.95 million -- the first year-over-year decline since 2006.

All told, LPS estimates that 6.98 million mortgages -- 13.02 percent of all outstanding loans -- were past due in August, down from 7.32 million at the same time a year ago.

The five states with the highest percentage of non-current loans were Florida (23.5 percent), Nevada (21.3 percent), Mississippi (18.6 percent), Georgia (15.6 percent) and Illinois (14.4 percent).

States with the highest rates of foreclosure starts are also the ones with the highest rates of new, seriously delinquent loans, LPS said.

For the last three months, the report showed, Fannie and Freddie's loan servicers have been ramping up foreclosure starts on borrowers who are behind on their payments by only two months. Foreclosure starts are also up even more sharply among borrowers who are behind by six months or more.

Among all loans in foreclosure, the average number of days delinquent was 478, up from 361 a year ago.

To see a listing of all Johns Creek foreclosures: http://bit.ly/JohnsCreekForeclosures

When you’re facing foreclosure, it’s critical to reach out and ask for the foreclosure help you need to save money and trouble—and possibly your home. Recruit the following five pros onto your foreclosure team.

1. A foreclosure counselor
Your first step to get foreclosure help should be contacting a foreclosure counseling agency approved by the U.S. Department of Housing and Urban Development.

“A foreclosure counselor should help you evaluate your current financial situation by looking at your bank statements, tax returns, and monthly expenses and income,” says Kimberly Allman, manager of homeownership preservation at the New York Mortgage Coalition in New York City. A foreclosure counselor also can help you understand the programs available through banks and government agencies and serve as an advocate to help you communicate with your bank.

And don’t worry about money—foreclosure counselors provide foreclosure help for free. Find one at NeighborWorks America or by calling HUD’s foreclosure counseling hotline at 800-569-4287 or its foreclosure prevention hotline at 888-995-HOPE (4673).

2. A REALTOR®
A REALTOR® can help you find out if a short sale, rather than a foreclosure, is the right path for you. Use this pro to discover if you can sell your house, how quickly, and at what price.

If a short sale seems right for you, make sure your agent is experienced with these. If not, ask for a recommendation for one who is. Short sales are tough to navigate, and they’re further complicated by your loan type—FHA vs. Veterans Administration vs. conventional loans. Real estate agents who specialize in short sales will know the proper steps and order of the steps involved. They’ll also be able to navigate the many parties involved in the process and over-burdened loss mitigation departments.

Look especially for agents who have the Short Sales and Foreclosure Resource (SFR) Certification, which requires specialized training.

3. A tax expert
You’ll need a tax expert for foreclosure help if you do a short sale or deed in lieu of foreclosure. Consult with a qualified tax adviser since forgiven debt may be taxable income, says Nancy Polomis, chair of the real estate development department at the law firm of Hellmuth & Johnson in Eden Prairie, Minn. You’ll face myriad other foreclosure-related tax issues as well, which require professional advice.

Tax advisers’ hourly rates range from $150 to $250, depending on where you live. A good choice is a certified public accountant. Check with your local CPA society to see if its members offer free advice at volunteer events like those sponsored by the Illinois CPA Society. Find a list of state CPA associations at TaxSites.

Another qualified tax adviser is an enrolled agent. EAs, like CPAs, are licensed to represent clients at an IRS hearing. Find an EA at the National Association of Enrolled Agents.

4. A credit counselor
If you’re having trouble getting a loan modification, a credit counselor can give you some foreclosure help. According to the National Foundation for Credit Counseling, a counselor can advise you on managing your money and help you develop a plan to help you avoid future financial difficulties. “Often people need credit counseling because the one thing that’s holding them back from getting an affordable loan modification is high credit card payments,” says Allman. Even if foreclosure is inevitable, credit score repair can help you get back into a home sooner.

Allman often refers foreclosure clients to the nonprofit Greenpath Debt Solutions, which operates in many states. You can find a list of government-approved credit counselors from the U.S. Trustee Program.

5. An attorney
Once your lender has filed a foreclosure lawsuit, contact an attorney. A lawyer can review the lender’s foreclosure papers to determine if it actually owns your mortgage or whether your loan servicer has made mistakes in applying your payments or assessing fees, says Lisa A. Magill, an attorney at Becker & Poliakoff in Fort Lauderdale, Fla.

You may be able to avoid foreclosure, or even a short sale, if you just have more time to sell your home, acquire secondary financing, or get a new job. For example, a lawyer can usually make arrangements with the lender to give you more time by filing responses and motions in the lawsuit, says Magill.

Also consider consulting a bankruptcy attorney, who can help you discover whether bankruptcy is a viable option for avoiding foreclosure, says Polomis.

Lawyers charge $150 to $300 per hour or a flat fee of $1,000 to $2,500 to defend a foreclosure action or file a bankruptcy petition. Contact your local legal aid office, such as the Mid-Minnesota Legal Assistance, or your local bar association, like the Florida Bar, for a list of agencies that offer free legal representation. A list of state resources may be found at the National Legal Aid and Defender Association.

See all the listed foreclosures in Atlanta at: http://bit.ly/AtlantaForeclosedHomes